HollyFrontier Corp. expects to spend $645-810 million on capital projects in 2022, a notable drop from a year in which it spent about $300 million on turnarounds and more than $500 million to set up a renewable diesel operation.
The leaders of Dallas-based HollyFrontier outlined their spending plans for 2022 in a US Securities and Exchange Commission filing, saying they are looking to put $250-270 million to work on their refining and marketing operations. That’s an increase of $60 million from 2021 and comes after HollyFrontier paid $614 million for a Shell refinery in the Seattle area. The company also plans to spend $45-60 million on its lubricants division, a small increase from 2021.
The two areas bringing the biggest change from 2021 are turnarounds-catalysts and renewables. In the former of those categories, HollyFrontier executives plan to spend $70-100 million, a drastic drop off the 2021 program. The change is in line with the company’s 2019-2020 cycle, when it spent $318 million and $95 million, respectively.
HollyFrontier’s renewables push – which involves renewable diesel production units in Cheyenne, Wyo., and Artesia, NM, as well as a pre-treatment unit at the latter complex – garnered nearly half of the company’s roughly $1.2 billion in capex in 2021. Those three projects will eventually cost the company $800-900 million; 2022 will see the last $225-300 million of that amount put to work. The midpoint is about $60 million higher than had been forecast late 2021 because of the timing of some invoices.
The Wyoming renewable diesel unit should book its first sales in first-quarter 2022 after being converted from crude refining. It will be followed in the second quarter by the New Mexico plant, and the pre-treatment unit – which execs expect to cover about 80% of their total feedstock needs – is nearing completion. Combined, the two renewable diesel units will have the capacity to produce 210 million gal/year. HollyFrontier will also begin to report their results as a standalone segment.
